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Economists Urge President to Support Investment in Telecommunications

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Economists Urge President to Support Investment in Telecommunications

“Unbundling” Requirements Slowing Progress and Innovation

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Richard Morrison, 202.331.2273

 

<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Washington, D.C., April 1, 2004—This week a group of economists and policy analysts wrote to President Bush to urge his support for investment in new telecommunication technologies.  Citing the President’s announced commitment to the spread of broadband nationally, the letter’s signatories advised him to stop the Federal Communications Commission from continuing to fight for burdensome regulations that the federal courts have consistently ruled against.  The D.C. Circuit Court of Appeals most recently struck down the FCC’s rules in March.

 

The letter points out the essential flaw in the FCC “unbundling” regulations, which force owners of networks to make their facilities available to competitors on government-mandated terms: “Businesses now taking advantage of current FCC rules characterize themselves as free-market ‘competitors,’ but they would be more accurately labeled as resellers of telecommunication services created and provided by others.  They exploit the FCC’s rules to obtain forced access to all the necessary facilities, which have been created by other companies.”

 

The signers go on to emphasize the importance of the current moment in moving toward a more open market: “The communications industry is at a historical turning point.  New broadband networks are the future in voice (and data) communications.  As broadband becomes ever more available and affordable, we can expect rapid growth in new products and technologies, creating gains in jobs and productivity that will benefit all Americans.  We ask that this Administration focus on the gains to the American economy and the American consumer from encouraging new investment in broadband, rather than on defending the current regulatory regime.”

 

Fourteen economists and policy analysts co-signed the letter, including Fred. L. Smith, Jr., President of the Competitive Enterprise Institute.

Click here   to obtain pdf of full letter.